What you don’t know can hurt you when starting a business
It’s not your fault: rookies to any industry are bound to make mistakes. Heaven knows I’ve made my share. Yet it pains me to see fresh entrepreneurs making big blunders simply because they don’t know what they don’t know.
Buying without money
Eagerness and optimism sometimes leads an entrepreneur to prematurely sign on scary dotted lines. For example, I spoke with a new business owner last week who had leased business space before he had secured any money from the bank. He was now on the hook to start paying $1600 a month.
Splash some cold water on your face. Launching a business takes time and planning – ‘winging it’ will lead to confusion, suffering and loss.
No partnership agreement
I’ve been fortunate to work with six business partners in my various past businesses. Partners can accelerate your business growth. But it’s foolish to partner up without an agreement.
Everything is easy until your business starts to earn money. That’s when things may change, and you or your partner may develop strong opinions about the other person’s work ethic, decisions, compensation package and outside interests.
Good paper makes good friends. Download an agreement, edit it and insist each partner take it to their own independent lawyer.
Failing to plan
A business plan forces you to think through all major decisions, establish goals, conduct market research and identify resources. Without a plan you risk wasting years of your time and wheelbarrows of money. Complete a short, ten-page plan outlining the first two years of your business life.